The current response appears to me, to be making assumptions that I'm not clear on.
We currently own a home but are also purchasing another home to move into in a year. We planned closing on the purchase in September,
So as it stands "today", at this very moment in time, you only own one home.
renting out the house until the construction plans were finalized in February (to either profit or cover some/all of the carry costs), starting construction in March, and moving in during the summer.
This is what throws me. Renting out which house? Based on the information provided, it appears you are buying land and construction of a house on that land will not start until March 2023 at the earliest. So you only have one house, and will continue to have only one house until construction is complete. So what is it you are going to rent out? The house you own "right now"? Where are you going to live?
Another interpretation is that you have sold the house you are living in "right now" (or will be closing on the sale in Sept 2022) and then you will be renting it from the buyer for about 5 months. Other than you may or may not have to pay taxes on any gain realized from the sale, you get no tax breaks on your federal tax return as a renter. State taxes "may" be a different story, depending on what state, and if that state taxes personal income. It also matters how things are worded and set up for the "rent back" terms in your sales contract.
Can you please confirm with more detail so that we "know" without a doubt you're being provided accurate information. You probably are - but lets be sure on that.
